Money for College: Don’t pay twice for student health insurance

February 16, 12:01 PMCollege Admissions ExaminerLauren Starkey

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Most college students are covered by their parents’ health insurance during their undergraduate years (many policies continue through age 23 if the dependent is a full-time student). But as NPR reported last week, they’re also covered by school policies—and that unnecessary coverage can cost families a couple thousand dollars a year or more.

Why don’t students who already have health insurance simply opt out of the school policies? One reason is the backward way many schools’ insurance programs work. Coverage is automatically provided for all students (and billed along with tuition, room and board, activity fees, and other costs) unless they fill out forms proving they’re eligible to opt out. This system is confusing enough to prevent thousands of students and their families from avoiding, or even being aware of, the double coverage.

When you’re evaluating the schools you’ve been accepted to, check the health insurance options, noting how you can opt out of the school plan. It can be difficult or even impossible to get a refund if policy coverage starts before you decide to forgo it. You’ll also need to check your current coverage: if you’re in an HMO or PPO and plan to attend college outside the service area of doctors and hospitals, find out what your out-of-pocket costs will be if you need medical care. In some cases, it makes sense to take the school coverage and avoid having to travel home to visit doctors (emergency care is typically covered no matter where it is needed).

Saving money for college and while in college is about much more than investments, financial aid, and scholarships. There are hidden fees, avoidable costs, and other traps that, once you’re in on them, can be sidestepped, leaving thousands of dollars in your pocket. Check back next Monday for another money-saving idea.